Tuesday, January 25, 2005

Writing in the Financial Times, he calls the Bush administration "despicable":

FT.com / Comment & analysis / Columnists - John Kay: Pension 'crisis' helps create one : Like most advanced economies, America faces demographic problems. The numerous baby boomers, the generation born in the 25 years after the second world war, will soon retire. Their fewer children and grandchildren will have to bake their bread and nurse their illnesses.
The US is relatively well placed to deal with these problems. Population imbalances are less severe than in Japan and most of Europe. And the budgetary implications are less acute: although America spends a lot on medical care, the retirement income the state provides is relatively low.
Moreover, bipartisan reform in the 1980s put America's social security system on a robust footing. Contributions were increased to build up surpluses to meet the growth in retirement benefits. These surpluses will continue to accumulate until around 2018 and then, on current projections, will be run down over the following 25 years. Since longevity continues to increase and America's growing income inequality means that the contribution base is growing less rapidly than national income, it will be necessary to reform the system to ensure its viability in the second half of the 21st century. But the Congressional Budget Office estimates that over the next 50 years the present system will receive contributions averaging 14.02 per cent of relevant income and pay out 14.29 per cent.
So why does the second term Bush administration, which does not seem to care about the real and immediate budget deficit in its principal activities, regard the funding of social security as its most urgent economic problem? I have been poring over these figures wondering if, from a distance of several thousand miles, there is something I have missed. But there does not seem to be. The numbers are not controversial: the same ones are used by the people who say there is an urgent need for reform. The interesting question they raise is not: "What should be done about social security?" It is this: "Why is this minor and distant issue subject to such intense political attention?"
There is a book on my shelves published in 1982, called The World Crisis in Social Security. I now feel slightly ashamed of my contribution to that volume. Not because of its content: my criticisms foreshadowed sensible reforms for Britain that were implemented soon after. Rather I feel ashamed for my youth and naivety and my failure to understand the game in which I was being asked to play.
A retreat from public sector pension provision might create a large flow of money into the stock market. This prospect leaves financial institutions salivating. So it has always been easy to obtain funding for projects such as The World Crisis in Social Security and much of this funding has been channelled through America's rightwing think-tanks. Greed in the investment community is conjoined with the principled opposition of those for whom America's social security system, popular though it may be with voters, is the legacy of that detested socialist Franklin D. Roosevelt.
Every pension system has weaknesses and there are always honest but simple scholars who can be encouraged to point them out. Hence my agreeable trip to Washington to debate "the world crisis in social security". I was joined by others who could tell of deficiencies in the pension systems of France, of Germany, and the public system of the US itself.
After decades of this propaganda, it is not surprising that most people are convinced that there is indeed a world crisis in social security. It is like having a surveyor continually crawling over your house. Once every defect has been pointed out, repeatedly, even the most robust of occupiers will believe their home is on the point of collapse.
The distasteful aspect of this campaign is not its effect on public debate. Politicians and policy analysts ought to be able to distinguish substance from puffery, and reality from misinformation, although there is a marked tendency for them to see only facts and figures to which they are ideologically predisposed. But the endless talk of crisis undermines the confidence of ordinary people in their security in old age and, most of all, in the ability of government to provide it. People who talk of the crisis in social security help create that very crisis. And, despicably, that is what some of these people intend.

Monday, January 17, 2005

So shrill that Dr. Mbogo needs to report to the Shoggoth Wing, stat, to deal with this exploding-head-case:

Amygdala: THE HEAD, IT DOTH EXPLODE. Sometimes all you need to do is just listen.

President Bush said the public's decision to reelect him was a ratification of his approach toward Iraq and that there was no reason to hold any administration officials accountable for mistakes or misjudgments in prewar planning or managing the violent aftermath.

This is because, boys and girls, elections are like magic beans. Once you have one, everything is magical and glowy and wonderful! All errors are magically wiped away, and everyone who committed any is either instantly killed and replaced by clone or made a member of the Cabinet. See, Bush secretly fired Rumsfeld and replaced him with an identical clone! Same for the other folks "staying on." Explains a lot, doesn't it? And it's a brilliant solution...

Editorial: Social Security/Blacks get more, not less, from it: Of all the lies -- let's call them by their right name -- that the Bush administration is spreading about Social Security, none is as vile as the canard Bush repeated last Tuesday, when he said, "African-American males die sooner than other males do, which means the [Social Security] system is inherently unfair to a certain group of people. And that needs to be fixed." That is an entirely phony assertion; it has been debunked by the Social Security Administration, by the Government Accountability Office and by other experts. Bush and those around him know that. For them to repeat what they know to be a blatant lie is despicable fear-mongering.

Bush didn't make up this phony line on his own; it comes from the Heritage Foundation, which a number of years ago did a study purporting to show that because African-Americans have a shorter life expectancy than whites, they get less in return for the taxes they pay into the Social Security system.

But when the Heritage study was examined by actuaries at the Social Security Administration and by the Government Accountability Office, serious methodological flaws and numerous bad assumptions were uncovered. For example:

• Heritage failed to factor in the progressivity of Social Security benefits; on a taxes-paid to benefits-received ratio, those with lower incomes get more back. Blacks tend to earn less than whites, and thus their Social Security benefits are larger in comparison to taxes they pay.

• Social Security is more than retirement benefits. It also includes survivor and disability benefits. Blacks benefit disproportionately from those programs. While blacks are 11 percent of the workforce, for example, they are 18 percent of those receiving disability benefits. Almost half the blacks receiving Social Security -- 47 percent -- are getting disability benefits or survivor benefits.

The Social Security actuaries found that Heritage had exaggerated substantially the amount blacks pay in Social Security taxes and low-balled the benefits they receive. "In fact," the actuaries said, "results from more careful research reflecting actual work histories for workers by race indicate that the non-white population actually enjoys the same or better expected rates of return from Social Security than for the white population."

The GAO reached the same conclusion. It said that, "In the aggregate, blacks and Hispanics have higher disability rates and lower lifetime earnings, and thus receive greater benefits relative to taxes [paid] than whites."

Is there any substance to [Human Rights Watch's] complaints? Well, yes — you should not make terrorists stay up late listening to Ratt and you should not make Iraqi convicts get naked and then laugh at them. If you're an American soldier doing these kinds of things, you'll be punished, even as others also try to punish your fellow soldiers and your country.

The only word for this is denial. Please, Denis, read the reports. At least thirty inmates have died after "coercive techniques" in U.S. custody. The government itself has conceded that the U.S. has tortured five inmates to death. Hundreds more have been hospitalized or permanently physically scarred. Even if you radically restrict your analysis to the night shift in Abu Ghraib, the abuses far outstrip forcing people to listen to music or laughing at nakedness. What has happened to American conservatism when it is reduced to ridiculing genuine and important issues of human rights?

Turn it around: why would anyone ever think that torturing 30 people to death would disturb the National Review?

Thursday, January 13, 2005

But when historians look back at the Bush presidency, they're more likely to note that what sets Bush apart is not the crises he managed but the crises he fabricated. The fabricated crisis is the hallmark of the Bush presidency. To attain goals that he had set for himself before he took office -- the overthrow of Saddam Hussein, the privatization of Social Security -- he concocted crises where there were none.

...

In fact, Social Security is on a sounder footing now than it has been for most of its 70-year history. Without altering any of its particulars, its trustees say, it can pay full benefits straight through 2042. Over the next 75 years its shortfall will amount to just 0.7 percent of national income, according to the trustees, or 0.4 percent, according to the Congressional Budget Office. That still amounts to a real chunk of change, but it pales alongside the 75-year cost of Bush's Medicare drug benefit, which is more than twice its size, or Bush's tax cuts if permanently extended, which would be nearly four times its size.

...

In short, Social Security is not facing a financial crisis at all. It is facing a need for some distinctly sub-cataclysmic adjustments over the next few decades that would increase its revenue and diminish its benefits.

Politically, however, Social Security is facing the gravest crisis it has ever known. For the first time in its history, it is confronted by a president, and just possibly by a working congressional majority, who are opposed to the program on ideological grounds, who view the New Deal as a repealable aberration in U.S. history, who would have voted against establishing the program had they been in Congress in 1935.

Saturday, January 08, 2005

Writing from some strange Virtual Kishinev, Frederick Kagan succumbs to shrill unholy madness and denounces Donald Rumsfeld--the head of the cossacks--while still declaring his love for George W. Bush, the Little Father, Batiyushka, the friend of us all. Ah! If only the Czar knew what the cossacks were doing in his name! The Little Father would save us!

I don't know if there are enough free beds in the Shoggoth Wing to hold the entire Weekly Standard staff:

Fighting the Wrong War: [We] find fault with Rumsfeld precisely because we do support the president and the war.... Rumsfeld has much to answer for, as well. Claims that there are no serious problems with military policy in Iraq and Afghanistan, or with the equipment our soldiers have, or with the number of troops available, are childish and damaging to efforts to identify and solve real problems....

[T]the most serious criticism... that he has refused to expand the American military.... Rumsfeld's defenders assure us he is not responsible. Only Congress can approve an increase in military end-strength; Rumsfeld has never opposed increasing the armed forces; more troops in Iraq wouldn't help anyway. These are the arguments deployed in behalf of the secretary of defense... they are evasions.... In no sense can Rumsfeld claim to have rushed aid to the Army in any way that is helpful in the current crisis. He has, in fact, consistently and vociferously opposed congressional attempts to offer such aid.... He has argued consistently that it would be better to "rearrange" the active and reserve components of the Army, and he has argued for increasing use of civilian contractors to free up soldiers for combat duties....

Congress has not been the problem here. Nor is it fair to blame Clinton entirely for this problem. Clinton downsized the military excessively, to be sure, and left an Army obviously too small for the missions it faced. But Rumsfeld has been in office for four years....

With more troops in Iraq during and immediately after the war, we would have been able to do the following things that we did not do: * Capture or kill thousands of Iraqi soldiers who were at that time still concentrated in combat units and had not yet melted back into the countryside with their weapons and their skills. * Guard the scores of enormous ammunition dumps from which the insurgents have drawn the vast majority of their weapons, ammunition, and explosives. * Secure critical oil and electrical infrastructure that the insurgents subsequently attacked, setting back the economic and political recovery of Iraq. * Prevent the development of insurgent safe havens in Najaf and Falluja, or at least disrupt them at a much earlier stage of formation. * Work to interdict the infiltration of foreign fighters across Iraq's borders.

If the U.S. Army had begun expanding in 2001, we would have been able to: * Establish reasonable rotation plans for our soldiers that did not require repeatedly extending tours of duty beyond one year. * Avoid the need to activate reservists involuntarily. * Dramatically reduce the frequency with which soldiers return from one year-long tour only to be sent immediately on another. * Let the troops that would still have been overstrained know that help really was on the way.

The U.S. military did not do these things because of Rumsfeld's choices.... [I]n no previous American war has the chief of the military administration refused to focus on the war at hand, preferring programs that could not help soldiers then in the fight to survive and win.... Rumsfeld's attitude has already led to a series of mistakes that have made a difficult situation more difficult. It has put the administration on the defensive about its conduct of a policy that is vital to America's national interest. It has distracted attention from the problem of winning the current war--our most important priority today bar none. These problems don't result from the liberal media or the antiwar crowd making a ruckus about nothing. They result from Rumsfeld's stubborn adherence to a wrongheaded policy. Surely, with the election safely over, there is no longer any need to protect the architect of these mistakes.

We must admit that the prognosis for Frederick Kagan is poor. Should he ever realize that what he is attacking are not *Rumsfeld's* but *Bush's* policies, he will never recover.

"Today, it is clear that these operations have fostered greater animosity toward the United States, undermined our intelligence gathering efforts and added to the risks facing our troops serving around the world," the officers wrote, referring to the Bush administration's detention and interrogation policies.

Although it stops short of directly opposing Gonzales's nomination, the three-page letter contains sharp criticism of his decisions related to military legal issues and argues that he is "on the wrong side of history."

"Repeatedly in our past, the United States has confronted foes that, at the time they emerged, posed threats of a scope or nature unlike any we had previously faced," the letter reads. "But we have been far more steadfast in the past in keeping faith with our national commitment to the rule of law."

Monday, January 03, 2005

Lew Rockwell takes time off from keeping 747's from falling apart in flight to point out that the emperor isn't the only one who is naked:The Reality of Red-State Fascism

A positive agenda of liberty is the only way we might have been spared the blizzard of government controls that were fastened on this country after Bush used the events of 9-11 to increase central planning, invade Afghanistan and Iraq, and otherwise bring a form of statism to America that makes Clinton look laissez-faire by comparison. The Bush administration has not only faced no resistance from the bourgeoisie. it has received cheers. And they are not only cheering Bush's reelection; they have embraced tyrannical control of society as a means toward accomplishing their anti-leftist ends.

After September 11, even those whose ostensible purpose in life is to advocate less government changed their minds. Even after it was clear that 9-11 would be used as the biggest pretense for the expansion of government since the stock market crash of 1929, the Cato Institute said that libertarianism had to change its entire focus: "Libertarians usually enter public debates to call for restrictions on government activity. In the wake of September 11, we have all been reminded of the real purpose of government: to protect our life, liberty, and property from violence. This would be a good time for the federal government to do its job with vigor and determination."

The vigor and determination of the Bush administration has brought about a profound cultural change, so that the very people who once proclaimed hated of government now advocate its use against dissidents of all sorts, especially against those who would dare call for curbs in the totalitarian bureaucracy of the military, or suggest that Bush is something less than infallible in his foreign-policy decisions.

Saturday, January 01, 2005

Ex-CEA Chief Economist Andrew Samwick has accepted a visiting appointment this spring at Miskatonic University in picturesque Arkham, Massachusetts. Here he writes in theWall Street Journal:

WSJ.com - The Economic Crystal Ball: Cloudy, or Clearing?: My biggest question about economic policy in 2005 is whether the federal government will make tangible progress in putting its fiscal house in order. For example, if we are in a cyclical upturn, then why are our tax and spending policies such that we are running budget deficits (even including the Social Security surplus) in excess of $400 billion? Why have we settled for a rather timid goal of merely cutting that budget deficit in half over five years? Leaving aside the longer-term solvency issues of Social Security and especially Medicare for the moment, if the president and Congress cannot balance the budget with six quarters of growth at a 4.4% annual rate and steady growth in the economic forecast, then I will be considerably less optimistic next year that price changes will be mild and that economic growth will continue....

Cutting taxes isn't the rational way to make the government smaller, the one true purpose of a Republican administration's fiscal agenda. The way to do that is to reduce government spending so that tax rates can subsequently be lowered with the budget in balance over the business cycle. We are nowhere close to that scenario, and so discussions in Washington policy circles of yet more tax cuts are particularly unhelpful. Taxes may be "bad," but long-term deficits are surely much worse. The president needs to keep some of his tax cuts, rescind or sunset the others, rationalize the alternative minimum tax, and then move on to entitlement reform of Social Security and Medicare, which remain the long-term fiscal challenges....